Let's get to our guest who joins us here in New York, Nicole Webb, Senior VP and financial advisor at Wealth Enhancement Group. Thanks for joining us. A pleasure to see you in person after what we've been through over it feels like the last two and a half plus going on three years, right, Yeah, it's it's absolutely fun to be here with And is that what we're seeing
in the market kind of a resumption of normalcy. We're seeing a lot of the air come out of those high flying tech stocks that everyone was pounding the table out during the pandemic. Yes, I absolutely think that right now a lot of these trades are all about the American psyche. It's no surprise to me that we're seeing resilience McDonald, Chippotle. Why people are driving their kids to school again, kids are doing sports Boeing, there's a demand
for more airplanes. This isn't shocking visa. People want to spend and the consumer still looks pretty strong. The economy as a whole hasn't weakened yet. And right now as we're seeing some of these cyclical trades where mega tech is pulling back, but there's these under lying blue chip companies that are doing so well that bodes well for
the FED and what the FED may do next. We want strength and resilience, that's broad, but we also need a pullback here that that makes people a little less wealthy, and that cap waiting of mega technology may do that without systemically breaking That's an interesting point, Nicole. I mean, that's interesting. But having said that, the as you just alluded to as well, the FED needs the economy too weaken. It needs those that's spending to be less strong if
they are going to reign in price hikes. Absolutely, but this is where I think we should focus a little bit more on the cap waiting of mega technology and the wealth destruction in the pullback in those in those companies. And when we talk about, even though it's been thrown to the wayside, this notion of a soft landing, it wasn't destruction of everything that the soft landing was this idea that perhaps we can create a pullback, which we
saw initially simply in the duration sensitivity of these technology companies. Um, but there's still going to be pockets of strength. I don't think we want the the American consumer. I don't think we want massive layoffs or this deep profits recession um. So I do think a lot of what's happening right now this week could bode well for the next FED meeting in the American public. So we have the GDP
report for Q three to six. That's not bad after a lot of negativity in the first half of the year, right. And then on top of that, if you look at the GDP price index four point one percent, which is less than half what we saw in Q two. So it may be that we've seen the peak in inflation. Things are softening just a bit, prices are coming down, and maybe we can have a serious conversation about the FED pivoted FED pivot or I think more about a FED stall out, the notion of a pivot to an
ease the moving of levers um. We don't want that, and I can't foresee it because again, duration sensitivity would shoot the market value of some of these more sensitive stocks back up, and they don't want that either. That's part of financial tightening, right. They want the equity market to settle down, they really do, and so that sensitivity will remain. Will see some of that probably more stagnant interest rate environment, That holding pattern will be difficult, especially
for technology companies. But what we still want or hope for is some strength and resilience in the broader market sectors where Americans are still living a fairly normal life. And and that's some of those trades that I was mentioning earlier. So what's the bond market telling in, Nico m h. The bond market is very interesting, uh, in that I believe that it has come to close to
a bottom. And because of that, you know, it's probably in my twenty years doing this the time that clients aren't objecting to the same notion of why am I investing in bonds? They don't do anything for me, Nicole, given what's been going on market, WI is it going to change the name of your company to the Wealth Protection Group? I actually really like that one. Uh. You know. One of the things that I will say, you know,
before we move on from fixed income is twofold. When we look at the equity markets right now, it's pretty clear that this isn't cash moving in from the sideline. So when we're looking at daily volumes, what we're seeing is these trades out of technology, cyclical trades into the industrials um and on the fixed income side. The reason why because you can pick up the two year treasury hovering around four to four and a half percent on any given day, and and that that works well for
people in this environment. UM, when it comes to reaching the bottom of the bond market forward looking, we think we're either in a holding pattern. We might even see an equity market rally if we only see fifty base this points in December. UM, just simply on this notion of a pivot. And so for all of those reasons, a great time to be buying in the fixed income market. So Rischus in Hong Kong, he's going to ask you
about opportunities where he happens to be. But I want to get to a lot of the volatility that we have seen and how that impacts investor psychology. You and I were talking during the break about the fact that so many people who are now participants in the market are unaccustomed, not really thinking about how to deal with
this enormous volatility. We have seen huge price wings there in for the long term, and yet that creates that volatility creates an emotional response, and sometimes they become reactive. Right Absolutely. I think when I think about the world, we live in today, which has been intensified by COVID.
So many things move at a robotic tempo, not necessarily a human tempo, and and so unjust lee retail investors who are trying to do the right thing participate in the equity markets are being hurt by not fully being able to digest what all of this volatility means, but feeling like they're doing the wrong thing when they're not participating. It's a tough moment in time for them. And UM, I actually have some empathy in that regard. Um, I'm not gonna ask you about what's going on in this
part of one. If you look at the Hong Kong market, Hank saying, is it levels not seen since two thousand and nine, would you believe? And on top of that, we've got pe ratios of about five and a half to six six or thereabouts. Tell me something. I mean that would normally be a screaming by, but it isn't for many. Yeah, it is a screaming by. Uh. You know, if we track back the US markets versus non and you can go developed Europe Asia. Um, you know, these
waves about performance are somewhat cyclical. I was saying that the broad markets were a buy when they were trading at a thirty percent discount to the US markets. Looking at them today, they look like an absolute by when we think about the heads of the economic table um, there's certainly no reason to be so US centric or dominant. It really though, comes down to anticipation of are you managing a p n L for day to day returns?
Are you a long term investor? Someone like myself certainly has an overwaiting right now to the international landscape for money that I'm not going to touch for a long time. So generally speaking, if we were to tease out some themes here, are you avoiding technology? Are you looking at more economically sensitive areas of the market, industrials, materials, that sort of thing. I like to think about diversification across styles of investing. So when it comes to passive investing,
the SNP gives you that predominant waiting towards technology. When it comes to your active and tactical compos own and I think that's where you get mindful about where am I making my purchases to round out that construction and so taking a value cyclical industrial tilt. As we anticipate a slower growth environment that's paid to wait. Idea around dividend paying stocks, picking them up at attractive prices is great. And then when you think about that, that that tactical
component of where are we in a global market cycle? Again, there's so much opportunity outside and while we might not give back purchasing power the US dollar may say strong for a bit um, on the far side of that, I think there is this resurgence of growth abroad. Nicole, thank you so much for joining us today. Just Nicole Webscinia, vice president and Financial Advice and Wealth Enhancement Group Enhancement Group, giving her take on I was getting on the market wise.
They've got a lot more, including a data check coming up. This is bloom Bag